Exam 19: The Audit of Accounting Estimates: Basic Material Relating to Accounting Estimates

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The tendency to value what we have because it is ours,regardless of its intrinsic value,is known as the ________.

(Multiple Choice)

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Question 41

The tendency to exaggerate the inevitability of causal sequences is known as the ________.

(Multiple Choice)

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Question 42

The susceptibility of an accounting estimate and related disclosures to an inherent lack of precision in its measurement is referred to as ________.

(Multiple Choice)

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Question 43

Which of the following statements regarding the risk-based reasoning (RBR)matrix is FALSE?

(Multiple Choice)

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Question 44

In CAS 540,quantified uncertainty is referred to as probability or risk.

(True/False)

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Question 45

Accounting estimate nirvana occurs when the width of the reasonable range is less than or equal to the material misstatement,which means that there is no significant risk for any estimates within the reasonable range.

(True/False)

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Question 46

Under Canadian audit standard CAS 706,the auditor may decide to place a "red flag" paragraph drawing attention to the uncertainty in the report.If there is material uncertainty about the going-concern assumption,for example,then CAS 706 requires that an emphasis of matter paragraph be added even when there is proper disclosure in the financial statements.Under what circumstances would uncertainty situations cause audit reports to be qualified for departures from GAAP?

(Essay)

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Question 47

Misstatements are defined as the difference between ________ and the nearest point of the reasonable range.

(Multiple Choice)

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Question 48

Uncertainty situations may cause audit reports to be modified (qualified)for departures from GAAP.

(True/False)

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Question 49

Which of the following statements regarding the going concern concept is FALSE?

(Multiple Choice)

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Question 50

Showing 41 - 50 of 50

The tendency to value what we have because it is ours,regardless of its intrinsic value,is known as the ________.

The tendency to exaggerate the inevitability of causal sequences is known as the ________.

The susceptibility of an accounting estimate and related disclosures to an inherent lack of precision in its measurement is referred to as ________.

Which of the following statements regarding the risk-based reasoning (RBR)matrix is FALSE?

In CAS 540,quantified uncertainty is referred to as probability or risk.

Accounting estimate nirvana occurs when the width of the reasonable range is less than or equal to the material misstatement,which means that there is no significant risk for any estimates within the reasonable range.

Misstatements are defined as the difference between ________ and the nearest point of the reasonable range.

Uncertainty situations may cause audit reports to be modified (qualified)for departures from GAAP.

Which of the following statements regarding the going concern concept is FALSE?

Introduction to Auditing

Auditors Professional Roles and Responsibilities

Auditors Ethical and Legal Responsibilities

Reports on Audited Financial Statements

Preliminary Audit Planning: Understanding the Auditees Business

Assessing Risks in an Audit Engagement

Internal Control Over Financial Reporting

Audit Evidence and Assurance

Control Assessment and Testing

Audit Sampling

The Revenues, receivables, and Receipts Process and Cash Account Balance

The Purchases, payables, and Payments Process

Payroll and Production Processes

The Finance and Investment Process

Completing the Audit Work

Applying Professional Judgment to Form the Audit Opinion and Issue the Audit Report

Other Public Accounting Services and Reportsreviews and Compilations

Professional Rules of Conduct Details and Auditor Responsibilities

Legal Liability Cases

Other Professional Accounting Services and Reports, including Fraud Auditing

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